Monday 12 April 2010

A jobs guarantee: shifting left, right or centre?

The Labour manifesto says this:

Our job guarantees will put an end to long-term unemployment and a life on benefits. No one fit for work should be abandoned to a life on benefit, so all those who can work will be required to do so. At the same time, we believe that people should be able to earn enough to live and be better off than on welfare

And then

We are determined that no-one should be scarred to life by joblessness. No young person in Britain should be long-term unemployed: those out of work for six months or more will be guaranteed employment or training through the £1 billion Future Jobs Fund, with mandatory participation after ten months. The fund will support 200,000 jobs. All those who are long-term unemployed for two years will be guaranteed a job placement, which they will be required to take up or have their benefits cut

This is an argument which has picked up a lot of traction among a broad range of left-of-centre voices since the recession.

The politics of this can be seen as very New Labour; or it may also be challenged as a right-facing rhetoric of being tough on the idea of "a life on benefits"; but it can also be seen as a leftwards shift in the responsibility of government to guarantee employment to those who want it, as backed by the TUC and many others.

Which it would be could crucially depend on the nature of the jobs guarantee policy.

Richard Layard - who with Paul Gregg has influenced government policy in this area on the Future Jobs Fund - produced a useful LSE CEP briefing paper on a jobs guarantee (PDF file), setting some tests as to what would make the difference between a 'jobs guarantee' and 'workfare'.

Layard argued:

Workers must be paid the rate for the job. This is essential for credibility. If the worker were paid benefit-plus, the image would be one of workfare: 'you are only entitled to your dole money if you work for it'. If the job were waged, the image would be 'you are now entitled to a job and you get paid for it'

James Purnell and the Demos Open Left project have also argued for a jobs guarantee in which government becomes the employer of last resort.

In fact, it is the final piece of the puzzle of welfare reform. It makes the welfare state both more supportive and more demanding. On the one hand, it is real protection – instead of offering people a life on benefits, it offers them what they really want: a job, and a chance to get their career back on track. It particularly helps disabled job seekers, who often face hidden discrimination. Government would have to make sure jobs were suited to their needs.

But a jobs guarantee also becomes a jobs backstop. Claimants have to take a job when it’s offered. That exposes those who are working on the side and claiming fraudulently. It calls the bluff of those who don’t want to work at all. We know from the New Deals that mandation works in activating people to find work themselves before compulsory options begin.

In a Fabian Review editorial 18 months ago in April 2009, I wrote:

Unemployment could prove the decisive issue. Those least to blame in this crisis are the 600,000 young people who will leave education this summer, with the same number again next summer. Perhaps only half will find jobs. To argue that government cannot do more is to accept four million unemployed as a price we have to pay. Just as Iain Duncan Smith reflects a growing awareness on the right of the social legacy of the 1980s, Professor David Blanchflower (for a long time a lonely voice on the Monetary Policy Committee) has set out several credible, affordable and time-limited measures urgently required to prevent the scars of this recession being felt in 30 years time.

This could prove the central political choice of the year ahead. New Labour came to power seeking to address youth unemployment. The principle of fairness rightly insists that those who could work must be willing to do so; there should also be meaningful work or training for all want it. Let us not offer responsibilities without rights.

The Fabian Solidarity Society report published last December also argued for contributory benefits, set at poverty prevention levels, dependent on participation in work, training, caring or other socially valuable activities.


donpaskini said...

Hi Sunder,

The offer of a job guarantee through FJF is a leftie idea and a good one. Making it mandatory is a right-wing idea and obviously stupid.

You are an employer - would you take on an employee who only applied for the job because otherwise they would have their benefits stopped? Would Richard Layard? Or James Purnell? Or any charity?

Obviously not, so who do they think is actually going to employ people who are forced to work in the jobs through the threat of being made homeless and destitute?

Sunder Katwala said...


Thanks for the response, navigating through the question and issue.

I am linking your longer piece at Liberal Conspiracy and the discussion there.